Registration Rights Agreement among the Company and the buyers



 EXHIBIT 4.3 
  

REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 11, 2004, among i2 Telecom International,
Inc., a Washington corporation (the “Company”), and the buyers signatory hereto (each such Buyer is a “Buyer” and all such Buyers are, collectively, the “Buyers”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof among the Company and the Buyers (the “Securities Purchase Agreement”). 
  
 The Company and the Buyers hereby agree as follows: 
  
 1. Definitions 
  
 Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “1933 Act” means the Securities Act of 1933, as amended. 
  
 “1934 Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Effectiveness Date” means, with respect to
the initial Registration Statement required to be filed hereunder, the 120th calendar day (150th in the event of a review by the SEC of the Registration Statement) following the Closing Date and, with respect to any
additional Registration Statements which may be required pursuant to Sections 2(c) or 3(c), the 90th calendar day
(120th in the event of a review by the SEC of the Registration Statement) following the applicable Filing Date of
such additional Registration Statement; provided, however, in the event the Company is notified by the SEC that one of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Business Day (as defined in the Certificate of Designations) following the date on which the Company is so notified if such date precedes the dates required above. 

 
 “Effectiveness Period” shall have the
meaning set forth in Section 2(a). 
  
 “Filing Date” means, with respect to the initial Registration Statement required hereunder, the 45th calendar day following the Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Sections 2(c) or 3(c), the 30th day following the date on which the Company first knows, or reasonably should have known that such additional Registration Statement is required hereunder,
provided, however, notwithstanding the foregoing, the Company shall not be obligated to file any subsequent Registration Statement required pursuant to Section 2(c) unless and until 90 days have elapsed since the Company has filed any
other Registration Statement pursuant to Section 2(c), with the first day following such 90-day period being the applicable Filing Date for such subsequent Registration Statement. 
  









 “Holder” or “Holders” means the holder or holders, as
the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Liabilities” shall have the meaning set forth in Section 5(a). 
  
 “Indemnitee” shall have the meaning set forth in Section 5(c) hereof. 
  
 “Indemnitor” shall have the meaning set
forth in Section 5(c) hereof. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the 1933
Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means, as of the date in question, (i) all of the Conversion Shares, (ii) all shares of Common
Stock issuable as dividends on the Preferred Shares, (iii) all Warrant Shares, (iv) any securities issued or issuable upon any stock split, dividend or other distribution recapitalization or similar event with respect to the foregoing and (v) any
additional shares issuable in connection with any anti-dilution provisions associated with the Preferred Shares. 
  
 “Registration Statement” means the registration statements required to be filed hereunder and any additional registration
statements contemplated by Sections 2(c) and 3(c), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement. 
  
 “Rule 415” means Rule 415 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule. 
  
 2. Shelf Registration 
  
 (a) On or prior to each Filing Date, the Company shall prepare and file with the SEC a “Shelf” Registration Statement covering
the resale of 130% of the Registrable Securities on such 

  

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Filing Date for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (unless the Company is not
then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith) and shall contain (unless otherwise directed by the Holders or as otherwise
directed by the SEC upon its review of such Registration Statement) substantially the “Plan of Distribution” attached hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts to cause
the Registration Statement to be declared effective under the 1933 Act as promptly as possible after the filing thereof, but in any event prior to the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement
continuously effective under the 1933 Act until all Registrable Securities covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness Period”). The Company shall immediately notify the Holders via facsimile of the
effectiveness of the Registration Statement on the same day that the Company receives notification of the effectiveness from the SEC.  
  
 (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without
affording the Holders the opportunity to review and comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied clause (i) of Section 3(a) of this Agreement), or (ii) the Company fails to file with the SEC a
request for acceleration in accordance with Rule 461 promulgated under the 1933 Act, within five Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that a Registration Statement will not be
“reviewed,” or not subject to further review, or (iii) prior to its Effectiveness Date, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of such Registration
Statement within 15 Business Days after the receipt of comments by or notice from the SEC that such amendment is required in order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed or required to be filed
hereunder is not declared effective by the SEC by its Effectiveness Date, or (v) after the Effectiveness Date, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required
to be effective, or the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities for an aggregate of 20 Business Days during any 12-month period (which need not be consecutive days) (any such failure or
breach being referred to as an “Event”, and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause (ii) the date on which such 5 Business Day period is exceeded, or for purposes of clause
(iii) the date which such 15 Business Day period is exceeded, or for purposes of clause (v) the date on which such 15 or 20 day period, as applicable, is exceeded being referred to as “Event Date”), then, on each such Event Date and
every monthly anniversary thereof until the applicable Event is cured, the Company shall pay to each Buyer signatory hereto an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% per month, pro rata on a daily basis, of
the Stated Value (as defined in the Certificate of Designations) of the Preferred Shares then held by the Buyer. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The liquidated damages pursuant to the terms hereof shall apply on a pro-rata basis for any portion of a month prior to the cure of an Event. 
  

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 (c) Notwithstanding anything to the contrary in Sections 2(a) or 2(b), if, after using
commercially reasonable efforts to convince the SEC otherwise, the Company is notified by the SEC that they will not permit the registration of any of the Conversion Shares or Additional Warrant Shares on the initial Registration Statement to be
filed hereunder, the Company shall be permitted to exclude any such Conversion Shares or Additional Warrant Shares not permitted by the SEC to be registered from the initial Registration Statement. In either such case, upon exercise of the AIRs by a
Holder, the Company shall file as soon as reasonably practicable but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than 130% of the number of such Registrable
Securities underlying such AIRs, and such Registrable Securities shall be subject to Sections 2(a) and 2(b). For purposes of Sections 2(a) and 2(b), the exclusion of such Registrable Securities from the initial Registration Statement (but not
subsequent Registration Statements required hereunder) shall not be deemed a breach of this Agreement or an Event. This Section 2(c) shall in no way apply to the Registrable Securities underlying the Preferred Shares and the Initial Warrants issued
at the Closing. 
  
 3. Registration Procedures 

 
 In connection with the Company’s registration
obligations hereunder, the Company shall: 
  
 (a)
Not less than four Business Days prior to the filing of each Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall, (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and
(ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning
of the 1933 Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably and in good faith object,
provided, the Company is notified of such objection in writing no later than two (2) Business Days after the Holders have been so furnished copies of such documents unless the Company is advised in writing by its counsel that such filing is required
in order for the Company to comply with its reporting obligations under the 1934 Act. 
  
 (b) (i) Prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration
Statements in order to register for resale under the 1933 Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as
so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within 15 Business Days, to any comments received from the SEC with respect to a Registration Statement or any amendment
thereto and as promptly as reasonably possible provide the Holders true and complete copies of all correspondence from and to the SEC relating 

  

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to a Registration Statement; and (iv) comply in all material respects with the provisions of the 1933 Act and the 1934 Act with respect to the disposition of
all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented. 
  
 (c) If during the Effectiveness Period and subject to Section 2(c), the Holder informs the Company that the number of Registrable Securities at any time exceeds 85% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file as soon as reasonably practicable but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than 130%
of the number of such Registrable Securities. 
  
 (d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (ii) through (vi) hereof, shall be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been
made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Business Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Business Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the SEC notifies the Company whether there will be a “review” of such Registration Statement
and whenever the SEC comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a selling stockholder or to
the Plan of Distribution, but not information that the Company believes would constitute material, non-public information); and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of
any request by the SEC or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability or the Registration Statement
or Prospectus; provided, however, that (a) notwithstanding anything to the contrary provided herein or elsewhere, shall require the Company and/or any of its affiliates, agents, officers, directors and/or employees to violate any law,
rule, regulation and/or fiduciary duty, and (b) any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure 

  

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by a Holder is required by law; provided, further, notwithstanding each Holder’s agreement to keep such information confidential, the
Holders make no acknowledgement that any such information is material, non-public information. 
  
 (e) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons may reasonably request. Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (f) Use commercially reasonable efforts to register or qualify the resale of such Registrable Securities as required under applicable
securities or Blue Sky laws of each State within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject the Company to any material tax in any such jurisdiction where it is not then so subject. 
  
 (g) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Securities Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
  
 (h) Upon the occurrence of any event contemplated by this Section 3, as promptly as reasonably possible under the circumstances taking
into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a
Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement
nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading. If the Company notifies the Holders in accordance with clauses (ii) through (v) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use
of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(h) to suspend the availability
of a Registration Statement and Prospectus, subject to the payment of liquidated damages pursuant to Section 2(b), for a period not to exceed 60 days (which need not be consecutive days) in any 12 month period. 
  
 (i) Comply with all applicable rules and regulations of the
SEC. 
  

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 (j) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable
moment. 
  
 (k) The Company may require, at any
time prior to the third Business Day prior to the Filing Date, each Holder to furnish to the Company (i) a statement as to the number of shares of Common Stock beneficially owned by such Holder, (ii) a selling shareholder questionnaire as provided
by the Company and attached hereto as Annex B, and, (iii) if requested by the SEC, the controlling person thereof, within three Trading days of the Company’s request. During any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Business Days of the Company’s request, any liquidated damages that are accruing at such time
shall be tolled as to such Holder only and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company. 
  
 4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence
shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Principal Market on which the Common Stock is then listed for trading,
and (B) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or
exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing prospectuses requested by the Holders), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, and (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holders. 
  
 5. Indemnification 
  
 (a)
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act) and the officers, directors, 

  

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agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (collectively, the “Indemnified Liabilities”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in a Registration
Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1)
such untrue statements or omissions or alleged untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(e). The Company shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. 
  
 (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the 1933 Act and Section 20 of the 1934 Act), and the directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Indemnified Liabilities (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review) arising out of or based upon any untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon: (i) such Holder’s failure to comply with the prospectus
delivery requirements of the 1933 Act or (ii) any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent, such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or to the extent that (1) such untrue statements or omissions are based upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the
type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the
Advice contemplated in Section 6(e). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the gross 

  

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proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (the “Indemnitee” or the “Indemnitees”) such Indemnitee shall promptly notify the Person from whom indemnity is sought (the
“Indemnitor”) in writing, and the Indemnitor shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnitee and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnitee to give such notice shall not relieve the Indemnitor of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have
prejudiced the Indemnitor. 
  
 An Indemnitee
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless: (1) the Indemnitor has agreed in writing
to pay such fees and expenses; or (2) the Indemnitor shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnitee in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnitee and the Indemnitor, and such Indemnitee shall have been advised by counsel that a material conflict of interest is likely to exist if the same counsel were to represent such
Indemnitee and the Indemnitor (in which case, if such Indemnitee notifies the Indemnitor in writing that it elects to employ separate counsel at the expense of the Indemnitor, the Indemnitor shall not have the right to assume the defense thereof and
the expense of one such counsel for each Holder shall be at the expense of the Indemnitor). The Indemnitor shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnitor shall, without the prior written consent of the Indemnitee, effect any settlement of any pending Proceeding in respect of which any Indemnitee is a party, unless such settlement includes an unconditional release of such
Indemnitee from all liability on claims that are the subject matter of such Proceeding. 
  
 Subject to the terms of this Agreement, all fees and expenses of the Indemnitee (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnitee, as incurred, within ten Business Days of written notice thereof to the Indemnitor
(regardless of whether it is ultimately determined that an Indemnitee is not entitled to indemnification hereunder; provided, that the Indemnitor may require such Indemnitee to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnitee is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnitee (by reason of public
policy or otherwise), then each Indemnitor, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as a result of such Indemnified Liabilities, in such proportion as is appropriate to reflect the
relative fault of the Indemnitor and Indemnitee in connection with the actions, statements or omissions that resulted in such Indemnified Liabilities as well as any other relevant equitable considerations. The relative fault of such Indemnitor and
Indemnitee shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a 

  

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material fact, has been taken or made by, or relates to information supplied by, such Indemnitor or Indemnitee, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Indemnified Liabilities shall be deemed to include, subject to the limitations set
forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount of gross proceeds received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
  
 The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may
have to the Indemnified Parties. 
  
 6. Miscellaneous

  
 (a) Amendments and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed
by the Company and all of the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders
and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 
  
 (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Except as set forth on Schedule 6(b), neither the Company nor any of its subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person
that have not been satisfied in full. 
  
 (c)
No Piggyback on Registrations. Except as set forth on Schedule 6(c) attached hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in
the Registration Statement other than the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders. Except for a registration statement on Form S-8, the
Company shall not file any other registration statements until the initial Registration Statement required hereunder is declared effective by the SEC, provided that 

  

 10 








 
this Section 6(c) shall not prohibit the Company from filing amendments to registration statements already filed. 
  
 (d) Compliance. Each Holder covenants and agrees that
it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (e) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 3(d)(ii), (iii) or (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration
Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(h), or until it is advised in writing (the “Advice”) by the Company that the use
of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company
may provide appropriate stop orders to enforce the provisions of this paragraph. The Company agrees and acknowledges that any period during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2(b). 
  
 (f) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC
a registration statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents
relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such
holder requests to be registered. 
  
 (g)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Securities Purchase Agreement. 
  
 (h) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent
of all of the Holders of the then-outstanding Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Securities Purchase Agreement. 
  
 (i) Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  

 11 








 (j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Securities Purchase Agreement. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 

 
 (l) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable. 
  
 (m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  

(n) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (o) Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer hereunder are several and not joint
with the obligations of any other Buyer hereunder, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way
acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Buyer shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. 
  
 ******************** 
  

 12 








 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 i2 TELECOM INTERNATIONAL, INC.

		
	By:	 	/s/ Paul R. Arena
	 Name:
	 	Paul R. Arena
	 Title:
	 	Chief Executive Officer


  
 [SIGNATURE PAGE
OF HOLDERS FOLLOWS] 
  

 13 








 [BUYER’S SIGNATURE PAGE TO ITUI RRA] 
  
 Name of Investing Entity:
                                        
                                 
 Signature of Authorized Signatory of Investing Entity:
                                        
                         
 Name of Authorized Signatory:
                                        
                         
 Title of Authorized Signatory:
                                        
                         
  
 [SIGNATURE PAGES CONTINUE] 
  

 14 








 ANNEX A 
  
 Plan of Distribution 
  
 Each Selling Stockholder (the “Selling Stockholders”) of the common stock (“Common Stock”) of i2 Telecom International,
Inc., a Washington corporation (the “Company”) and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on the Principal Market or any other stock
exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling shares: 

 

	 	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits Buyers; 

  

	 	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;


  

	 	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	privately negotiated transactions; 

  

	 	•	settlement of short sales entered into after the date of this prospectus; 

  

	 	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	a combination of any such methods of sale; 

  

	 	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or 

  

	 	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “1933 Act”),
if available, rather than under this prospectus. 
  
 Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for
the Buyer of shares, from the Buyer) in amounts to be negotiated. Each Selling Stockholder does not expect these commissions and discounts relating to its sales of shares to exceed what is customary in the types of transactions involved. 

 
 In connection with the sale of our common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or other financial 

  

 A-1 








 
institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The Selling Stockholders may
also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
  
 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be
“underwriters” within the meaning of the 1933 Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the 1933 Act. Each Selling Stockholder has informed the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. 
  
 The Company is required to pay certain fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the 1933 Act. 
  
 Because Selling Stockholders may be deemed to be “underwriters”
within the meaning of the 1933 Act, they will be subject to the prospectus delivery requirements of the 1933 Act. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the 1933 Act may be sold under
Rule 144 rather than under this prospectus. Each Selling Stockholder has advised us that they have not entered into any agreements, understandings or arrangements with any underwriter or broker-dealer regarding the sale of the resale shares. There
is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Stockholders. 
  
 We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule 144(e) under the 1933 Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to the prospectus or Rule 144 under the 1933 Act or any other
rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with. 
  

Under applicable rules and regulations under the 1934 Act, any person engaged in the distribution of the resale shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two business days prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the 1934 Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of our common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this prospectus to each Buyer at or prior to the time of the sale. 
  

 A-2 








 ANNEX B 
  
 i2 Telecom International, Inc. 
  
 Selling Stockholder Notice and Questionnaire 
  
 The undersigned beneficial owner of common stock, par value no per share (the “Common Stock”), of i2 Telecom International, Inc., a
Washington corporation (the “Company”), (the “Registrable Securities”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “SEC”) a
registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “1933 Act”), of the Registrable Securities, in accordance with the
terms of the Registration Rights Agreement, dated as of
                                    , 2004 (the
“Registration Rights Agreement”), among the Company and the Buyers named therein. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. 
  
 Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

  
 NOTICE 
  
 The undersigned beneficial owner (the “Selling Stockholder”)
of Registrable Securities hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless otherwise specified under such Item 3) in the Registration Statement. 
  

 B-1 








 The undersigned hereby provides the following information to the Company and represents and warrants that such
information is accurate: 
  
 QUESTIONNAIRE 
  
 1. Name. 
  

	 	(a)	Full Legal Name of Selling Stockholder 

  

  

	 	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held: 

  

  

	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly you indirectly alone or with others has power to vote or dispose of the securities covered by
the questionnaire): 

  

  

2. Address for Notices to Selling Stockholder: 
  


	
	  

  

 Telephone:


	 Fax:


	 Contact Person:



  
 3. Beneficial Ownership of
Registrable Securities: 
  

	 	(a)	Type and Principal Amount of Registrable Securities beneficially owned: 

  

  

  

  

 B-2 








 4. Broker-Dealer Status: 
  


	 	(a)	Are you a broker-dealer? 

  
 Yes  ̈        No  ̈ 
  

	 	Note: 	If yes, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	 	(b)	Are you an affiliate of a broker-dealer? 

  
 Yes  ̈        No  ̈ 
  

	 	(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? 

  
 Yes  ̈        No  ̈ 
  

	 	Note: 	If no, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  
 5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder. 
  
 Except as set forth below in this Item 5,
the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3. 
  

	 	(a)	Type and Amount of other securities beneficially owned by the Selling Stockholder: 

  

  

  

 B-3 








 6. Relationships with the Company: 
  
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity
holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 

 
 State any exceptions here: 
  

  


 
 The undersigned agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective. 
  
 By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of
such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the
related prospectus. 
  
 IN WITNESS WHEREOF the undersigned, by
authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. 
  

											
	Dated:
                                        
    	 	 	 	 Beneficial Owner:                                 
                                      
         

						
	 	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 	 	 Title:
	 	 

  
 PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 
  
 i2 Telecom International, Inc. 
 300 Yamato Road, Suite 2112 
 Boca Raton, Florida 33431 
 Facsimile: (561) 994-5381 
 Attention: Paul R. Arena 
  

 B-4